business, accounting and financial studies …...which of the following statements about'unity...

2017-DSE BAFS

PAPER 1 HONG KONG EXAMINATIONS AND ASSESSMENT AUTHORITY

HONG KONG DIPLOMA OF SECONDARY EDUCATION EXAMINATION 2017

BUSINESS, ACCOUNTING AND FINANCIAL STUDIES PAPER 1

8.30 am - 9.45 am (1 hour 15 minutes)

This paper must be answered in English

GENERAL INSTRUCTIONS

(I) There are TWO sections, A and B, in this Paper. Section A consists of multiple-choice questions andSection B contains short questions.

(2) Answer ALL questions in Section A. There are two parts in Section B: Answer ALL questions in Part 1and ONE of the two questions in Part 2.

(3) Answers to Section A should be marked on the Multiple-choice Answer Sheet while answers to SectionB should be written in the Answer Book. In the Answer Book, start EACH question (not part of aquestion) on a NEW page.

(4) The Answer Sheet for Section A and the Answer Book for Section B must be handed in separately at theend of the examination.

INSTRUCTIONS FOR SECTION A (MULTIPLE-CHOICE QUESTIONS)

(1) Read carefully the instructions on the Answer Sheet. After the announcement of the start of theexamination, you should first stick a barcode label and insert the information required in the spacesprovided. No extra time will be given for sticking on the barcode label after the'Time is up'announcement.

(2) When told to open this book, you should check that all the questions are there. Look for the words'ENDOF SECTION A'after the last question.

(3) All questions carry equal marks.

(4) ANSWER ALL QUESTIONS. You are advised to use an HB pencil to mark all the answers on theAnswer Sheet, so that wrong marks can be completely erased with a clean rubber. You must mark theanswers clearly; otherwise you will lose marks if the answers cannot be captured.

(5) You should mark only ONE answer for each question. If you mark more than one answer, you willreceive NO MARKS for that question.

(6) No marks will be deducted for wrong answers.

Not to be taken away before the end of the examination session

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Based on the following information, answer Questions 21 and 22.

As at 31 December 2016, Wong's firm had the following assets and liabilities:

Non-current assets Bank Cash Inventory Trade payables Trade receivables Long term bank loan

21. What is the quick ratio of Wong's firm for 2016?

A. 1.16: 1B. 2.77: 1

C. 3.59: 1

D. 6.02: 1

22. What is the amount of working capital in Wong's frrm as at 31 December 2016?

A

B

c

D

$103 000 $152 000 $223 000 $503 000

＄

280 000 18 000 58 000 71 000 86 000

162 000 120 000

23. Which of the following are the benefits for a borrower of maintaining a good personal credit record?

lower mterest rate on personal loan (2) higher credit limit(3) better terms when openmg a term deposit account

A. (1) and (2) onlyB. (1) and (3) onlyC. (2) and (3) onlyD. (1), (2) and (3)

24. Which of the following statements about'unity of direction' is correct?

A. Each supervisor is responsible for one project at a time.B. Each employee works towards one goal in each period.C. Employees working on the same project have the same goal.D. The goals of a business should be accomplished within a reasonable timeframe.

25. Which of the following descriptions about accounting assumptions, principles and conventions is correct?

A. Historical cost: all business transactions should be recorded in the booksB. Business entity: a sole proprietor can record his personal spending in the books of his businessC. Consistency: the accounting policies and methods cannot be changed once adoptedD. Going concern: a business will continue in operation for the foreseeable future

2017-DSE-BAFS 1-6 9


26. Which of the following will affect the share price of a listed company selling motorcars?

(1) fuel price(2) interest rate(3) dividend policy of the company

A. (1) and (2) onlyB. (1) and (3) onlyC. (2) and (3) onlyD. (1), (2) and (3)

27. Which of the following is not an advantage of adopting democratic leadership for a business?

A. enhance operational efficiencyB. widen managers' exposureC. strengthen staff support for business policiesD. improve mutual understanding between management and staff

28. Which of the following double entries is/are correct?

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）

n、Q6

Transaction Settled a trade debt by cheque Sold the office furniture of the firm on credit Paid carriage expenses for delivering goods to customers in cash

A. (1) onlyB. (1) and (3) onlyC. (2) and (3) onlyD. (1), (2) and (3)

Account to be debited Trade payables

Trade receivables Carriage outwards

29. Which of the following statements about accounting ratios is/are correct?

(1} They are used to evaluate the fmancial results of a business.(2) For the calculations of all profitability ratios, the denominator is'Sales'.(3) The acid-test ratio of a frrm is higher than its current rat10.

A. (1) onlyB. (1) and (2) onlyC. (1) and (3) onlyD. (2) and (3) only

Account to be credited Bank Sales Cash

30. Which of the following statements about a nominal partner is/are correct?

(1) He is liable for the debts of the partnership.

(2) He takes part in the operation of the partnership.

(3) His reputation helps promote the partnership's businesses.

A. (1) onlyB. (2) onlyC. (3) onlyD. (2) and (3) only

2017-DSE-BAFS 1-7

END OF SECTION A

10


3. Company A and Company B are retail businesses selling electrical appliances. Their organisation chartsare as follows:

Company A

Accounting and

Finance Manager

CompanyB

Home Appliance Manager

Sales and Marketing Manager

General Manager

Human Resources Manager

General Manager

Office Appliance Manager

(a) State the form of departmentalisation adopted by the two companies:

(i) Company A

Risk Management

Manager

Mobile Phone

Manager

(ii) CompanyB (2 marks)

(b) Which of the General Managers of the two companies above has a wider span of control?

Recently, the warehouse of Company A caught frre, which led to substantial losses.

(I mark)

(c) Which department of Company A should be responsible for claiming insurance compensation?Explain one main role of this department m the company. (3 marks)

The financial year of Company B ends on 31 December. On 4」anuary 2017, Company B received an electricity bill for December 2016 of $9500. It then settled the bill on 29 January 2017.

(d) Explain, with a relevant accounting principle or concept, in which year the electricity of $9500should be recorded as an expense. (3 marks)

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Part 2 (10 marks) Answer ONE question in this part.

Based on the following information, answer either Question 4 or 5.

John commenced a firm selling grocery and household products on I January 2016. Three employees were hired for the operation of the firm.

The following balances were obtained from his books as at 31 December 2016:

Capital, 1」anuary 2016Bank overdraft Furniture Sales Purchases Returns inwards Returns outwards Discounts received Operating expenses

＄ 240 000 173 400 204 000 796 200 500 400

1 800 1 500 2 100

507 000

Answer ONE question.

4. (a)

(b)

Prepare for John's frrm a trial balance as at 31 December 2016.

What is business ethics?

(5 marks)

(I mark)

(c) For each of the following stakeholders, illustrate with one example how John can ensure that theoperation of his frrm is socially responsible:

(i)

(ii)

employees of the firm

residents living around the frrm

(2 marks)

(2 marks)

(Total: 10 marks)

5. The inventory as at 31 December 2016 was valued at $195 000.

(a) Prepare for John's frrm an income statement for the year ended 31 December 2016. (5 marks)

A business consultant advised John to set goals for his firm.

(b) State the management function that the task of setting goals for John's firm belongs to. (1 mark)

(c) Explain two reasons why John should set goals for his frrm. (4 marks)

(Total: 10 marks)

END OF PAPER

2017-DSE-BAFS 1-10 13


business, accounting and financial studies …...which of the following statements about'unity...

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